Minimum Acceptable Rate of Return (MARR)

MARR

Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other projects. A synonym seen in many contexts is minimum attractive rate of return.

The hurdle rate is frequently used as a synonym of cutoff rate, benchmark and cost of capital. It is used to conduct preliminary analysis of proposed projects and generally increases with increased risk.

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ZeeZee’s Construction Company has the opportunity to select one of four projects (A, B, C,...... MARR... analysis.If MARR = 50% then project ________(A, B, C, D, Null)is preferred based on an incremental IRR analysis.Assume...

The purchase price of new CNC machine is $ 80,000 and its annual operating cost is $ 5000. The...... MARR... 1.5What is the correct factor for P/A when MARR is 10% 1.6What will be the book value of the CNC Machine at the end of year 6 1.7What...

Problem 1. A) Determine the MARR for a company that can invest excess funds at 6% and requires 7% profit margin. B) What if, instead, the company borrows funds at 9%? a) MARR 13.00% b) MARR 16.00% 4 5 6 7 8 9 10 11 12 13 14 1 2...

The best estimates for two investment opportunities are as follows: Alternative 1 Alternative 2 $X...... MARR... estimated life of 4, 8, 12 years (x-axis). Decide which alternative is more desirable. Assume the salvage values and annual operating...

Ryan has received cost and salvage value estimates for two competing fire sprinkler systems to be...... the MARR is larger than this value. Figure 8-6

Consider the four projects with cash flows as shown. Before proceeding to the questions, we will...... MARR... accept D with MARR = 20%? How would you modify the IRR acceptance rule when examining project D?f) Suppose A and B are mutually...

A company's current revenue is $15,264 per year. Because new competitors have entered the market,...... MARR... deposit extra money to cover its increased maintenance costs for the next 13 years. How much should they deposit now if they expect costs...

A sales engineer claims that his pump is economically justifiable. He says that for a cost of...... MARR... = 20%. 2. 3. How can the equipment in number 2 be justifiable? A. Raise the annuity to at least P38,241.76 В. Raise the MARR to 23%...

The BK Company is considering five proposals for new equipment, as indicated in Table. Each piece...... MARR... in subprojects from the next project on the list if possible 1.2 Use funds left in the "Do nothing alternative" at MARR or at less...

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